The Business of Cycles

Strained and disillusioned with your business?  

Don’t panic – it’s quite normal and a natural part of the journey to having a mature and truly viable business.  

Remember that day when you and your fellow stakeholders were inspired to launch your business. How exciting was that!  Seems an age ago now, doesn’t it?  

Business cycles head clocks

The commitment you all made. The success of those first few years. And now... ‘frustration?’...  Why’s it so hard?  We got so much right yet it’s now such an effort and we seem to be absorbed by today’s operational challenges. What happened?

Business Cycles

Well, don’t think you’re alone. There are business cycles that all progressive and successful companies go through on their route to maturity, sustainability and success. That’s ‘all’ companies that make it that far, not just some. 

However, most are unaware of the normality of these cycles and where they are in that journey.  They fail or drift into stagnation when they don’t make the appropriate adjustments to shape their business to progress forward.

What are these cycles?

We are typically familiar with many of the personal cycles we operate in – the economic cycle, our patterns of sleeping, eating and exercise, unemployment and political cycles. And with relatively new but critical issues for companies – environmental; like climate and plastic, and demographic; like millennials. 

But few companies are fully aware of how cycles drive the energy and sentiment in a business. Nor how managing around these is critical to making the right plans, decisions and leveraging that energy.

Take the example of the hiring of a new manager into a business that is strained and disillusioned. The recruit will be on their own personal cycle and will be excited and energised. They will see different things to managers who have been in the business for many years. 

Recognising the different points of the cycle that the individuals are at will allow communication and opportunity to be maximised.  New ideas can be leveraged, whereas ignoring them may well result in conflict and frustration.

Imagine this

You’ve been running your company for a number of years and your feeling strained and disillusioned. 

Two years back the cash was rolling in. Revenues had accelerated fast from the year before and you’d been able to reward yourself and the team with a healthy bonus.  You realigned your lifestyle and committed to new financial obligations that you’d been previously holding back on. 

With the wind in your sails, you'd decided to increase the company’s borrowings and push ahead with some demanding sales targets. 

Now, further down the road, it feels like you have the world on your shoulders and the team’s heads are down. Costs have escalated more than expected and there seems to be a notable lack of momentum throughout the business. 

You’re beginning to wish you’d cashed in your chips and sold out early before leveraging the business further and taking on the extra work, challenges and risks.

What went wrong?

Maybe you're struggling to retain your clients, making it harder to grow your sales when existing clients aren’t coming back for more. This might be because your sales process is too focussed on new sales and your follow-up engagement with customers’ needs to be looked at. 

Perhaps your sales channels aren’t positioning your products and services in the right way. This maybe because your brand is misaligned sapping the energy of your business and making the sales process a continual push instead of pulling in new customers.  A lot of small and younger businesses fail because of this. 

Are there issues with the quality of your offering or the price you are offering it at?

Or, don’t your products meet the exacting standards customers demand in today’s world? Has innovation been a strong enough focus? 

It could be that your management aren’t performing and lack the ability to step up and energise their teams. Or maybe they have the expertise but the resources they have available can’t deliver what’s required and a reassessment of their functions and responsibilities is needed. 

Perhaps the business strategy has gone out of line with what the stakeholders want to achieve.  Or, maybe the whole vision and purpose of the company has been lost in the desperation to manage the daily challenges which have sucked up all the energy and focus of the business today.

Time to regenerate

Don’t despair!  The fact that you have reached the phase of the cycle where you are now ‘strained and disillusioned’ with your business is an achievement in itself.  Many businesses will have either sold out or extinguished well before getting this far. 

However, it does now require a conscious effort to challenge and regenerate the core drivers of your business to step up and progress forwards. Otherwise, the business will drown in its lack of energy and drift towards an untimely exit.

There are two points in the life cycle of a company where the owners of a business may be keen to sell their shares.

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    The first, typical of a serial entrepreneur, is when their product of service has just started to generate a lot of cash and an acquisitive investor may be interested in getting access to a positive cash flow in that sector. Often the existing owners of the business are an integral part of the revenue generation and potentially a long earnout period may be required
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    The second, is after a recreation phase when the early positive cash flows have been ploughed back into the business, the company has proved it can scale up and handle the pressures of doing so. A trustworthy brand has been established and the founders of the business have proved they are dispensable without impacting the company’s revenues

The sentiments of 'strained and disillusioned' typically happen between these two potential business sale points and requires a recreation phase to propel the company forward into maturity and away from decline and expiry. Achieving this will take you to a place you and the management can feel proud as you observe a business that has its own momentum allowing you to focus on the future and new opportunities for you and/or the business.

Understanding and anticipating these cycles allows a business to manage the transitions into future phases. 

Awareness of the business cycles that do exist is critical. Then the business can manage them or ignore them as necessary. Being strained and disillusioned is just a natural segment of the business lifecycle – embrace it!

About the Author

Executive Coach and successful provider and creator of Treasury and IT services to clients. Significant project management, consulting and training experience. Positive and creative.

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